Q: Why doesn’t my insurance company just pay my claim?

Many policyholders are shocked when their insurance companies refuse to pay their claims, or pay less than what is owed. The fact of the matter is that your claim puts the insurance company in the position of determining how much money it will have to pay you. Most insurance companies are for-profit companies, and they increase their profits by not paying claims. That, naturally, provides a strong motivation for the insurance company not to pay claims, or to pay less than it should. Some insurance companies even compensate their adjusters and managers based on how little they pay on claims. Most insurance companies and adjusters are honest and pay what they owe. However, human nature being what it is, the tendency is for the insurance company to find reasons --- legitimate or not --- to delay, deny or underpay claims. If the insurance company’s reasons for not fully paying your claim are unreasonable, then it is called “bad faith.” Most states have laws which punish the insurance company for unreasonably failing to fully and promptly pay your insurance claim. Under the proper circumstances, you may recover more than your insurance claim as “bad faith” penalties against the insurance company.

Q: What rights do I have under my property insurance policy?

The insurance policy is considered a written contract between you and your insurance company. Each state has its own laws governing how the insurance policy should be interpreted, and setting out the rights and responsibilities of both the policyholder and the insurance companies. There are many different kinds and forms of property insurance policies, with different terms and provisions. Your specific rights and responsibilities depend on the terms of your insurance policy; the law of your state, and the facts of your claim. Identifying your specific rights and responsibilities is only possible through a consultation with an attorney. Generally, you have the right to demand that the insurance company respond promptly to your requests for information about the claim; investigate and pay your claim within a reasonable time; pay the full amount of repairing the damage; and reimburse you for covered costs according to your policy.

Q: How do I know if and when my insurance claim has been denied?

Insurance companies will typically deny a claim in a letter stating that the claim will not be paid, and explaining the basis for their refusal to pay. Additionally, the insurance company may deny the claim through inaction by failing to investigate and pay the claim within a reasonable time.

Q: How do I know if and when my insurance claim has been underpaid?

Insurance companies usually send the policyholder a letter stating how much they intend to pay on the claim, along with an explanation of how they came to they came to the decision. Many times, that amount is not enough to cover the actual cost of repairs, which the policyholder typically discovers when obtaining repair estimates. Also, the insurance company may only agree to pay a part of your claim, to pay for some but not all of the damage, or to pay only for a lower quality replacement. Sometimes the insurance company wrongfully attributes covered damage to a non-covered cause such as deterioration, long-term or pre-existing damage, or failure to make repairs.

Q: What if I suspect my insurance carrier’s claim denial may be incorrect?

Many policyholders mistakenly accept the insurance company’s denial or underpayment of the claim because they simply do not understand their rights under the insurance policy, or how property insurance works. Sometimes policyholders underestimate how much it will cost to restore their damaged property. If you believe that your insurance claim should be covered, and the insurance company refuses to pay, you should have your claim evaluated by an attorney. If you discover that it will cost more to repair your property than the insurance company has paid, you should consult an attorney. Essentially, if you disagree with any part of the insurance company’s decision regarding your claim, you should consult an attorney.

Q. What if the insurance company backs up its decision with an opinion by an engineer?

A common practice among insurance companies is to hire an engineer to evaluate the cause of claimed damage, ostensibly so that the insurance company can determine whether or not the property was damaged by a cause covered by the policy. Not all causes of damage —- such as deterioration or rot —- are generally covered by property insurance policies. If the insurance company’s engineer decides that the damage to your property was caused by something not covered by your policy, or that your property was not damaged, you should consult an attorney to determine whether that is actually true. Engineer’s opinions on these matters can vary widely. Also, some engineers work almost exclusively in providing opinions to insurance companies and, of course, the insurance companies would not use these engineers repeatedly unless their opinions generally provided legitimate-sounding reasons which would allow the insurance companies to deny or underpay claims. In fact, courts have determined that some engineers have engaged in outright fraud in these matters. If an insurance company denies or underpays your claim based on an engineer’s report, you should consult an attorney.

Q: Do I need a lawyer to evaluate the insurance carrier’s denial of my claim?

Most insurance claims are paid or denied properly, or are resolved without the need to retain a lawyer. If the insurance carrier has made an honest mistake, you may be able to resolve it yourself with a phone call or letter. In some instances, however, you may need an experienced attorney. Many claims are factually or legally complex and involve a significant amount of money or other loss. An experienced attorney can assist you in identifying mistakes by insurance carriers, and can explain your options to you. Because the laws governing insurance generally favor policyholders, an experienced insurance lawyer can often successfully challenge an insurance carrier’s decision even in situations that may seem hopeless to you.

Q: What are my options if I want to challenge the decision regarding my insurance claim?

If you believe an insurance carrier has incorrectly denied or underpaid your claim, you should contact an experienced property insurance lawyer to learn about your options. An experienced insurance lawyer will be able to explain your options, and the pros and cons of each option. Depending on the law of your state, the terms of your insurance policy, and the facts of your claim, your insurance attorney may resolve your case by communicating with the insurance company; engaging in the informal process called appraisal; conducting a mediation; or even filing a lawsuit. An experienced property insurance attorney can explain all of these options to you, and help you decide which is the best option for you.

Q: How can the Baker Nicholson Law Firm assist in disputes with insurance carriers?

The attorneys at Baker Nicholson are able to help most policyholder clients with a no-cost initial coverage review and consultation. This initial consultation may involves either a personal meeting or telephone call with the client. It also includes a review of documentation and any policy documents, a preliminary legal analysis of the insurance carrier’s claim denial, and an outline of the client’s options in resolving the insurance dispute. The initial consultation is free, and is intended to provide the client with an overview of available options.

Q: What kind of fees does the Baker Nicholson Law Firm charge?

Baker Nicholson usually represents clients in insurance claims on a contingent fee basis, meaning that the client does not pay Baker Nicholson anything until and unless Baker Nicholson is successful in obtaining additional payment from the insurance company for the client. Baker Nicholson’s fee is a percentage of the amount recovered, and is always reasonable. The attorney at Baker Nicholson will explain all fees and expenses at the free initial consultation.

Q: Will I have enough money to repair my property after paying my lawyer?

It is important to keep in mind that if the insurance company has denied or underpaid your claim, and has refused your attempts to resolve the dispute, then you likely will not get any more money at all without professional intervention. Even if you have to pay an attorney to recover your money, you will receive more money than if you had done nothing at all. Under some circumstances, the law may require the insurance company to reimburse you for all or part of Baker Nicholson’s fees and expenses. Also, in some cases, the law may actually require the insurance company to pay you more than your insurance claim as interest or bad faith penalties against the insurance company. The attorneys at Baker Nicholson Law Firm can explain all this at your free initial consultation.

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